In the absence of a POA, a client would be able to sell or pledge shares which he/she owns only upon physically submitting the Delivery Instruction Slips (DIS) to the broker. This is both inconvenient and time consuming for everyone. For an active investor/trader, sending physical instruction slips each time he or she wants to do a transaction is difficult and expensive too. Please note that it is a specific POA, it restricts the nature of transactions that can be executed by the POA holder to the Specific account (Not General POA). Hence, you will only be giving authority to the POA holder for the purpose of trade settlements. In any case, the client shall receive all transaction related information via contract notes, statement of accounts etc. on a timely basis. This helps the client to stay in touch with the activities that happen in the respective demat account.

Note: Although POA is not mandatory as per SEBI regulations, it is a standard requirement which helps stockbrokers in fulfilling the trade settlements on time and without any hassles. There are no additional charges or fees with regards to the POA of your demat account. It’s just a requirement to help improve your experience. A POA is an authority given to the POA holder to act on your behalf but it does not stop you from operating your own account. You can operate your account without any hindrances.